Technology lifecycle management is about inventing technologies, detecting latent potentials, predicting growth dynamics, leveraging opportunities, making the transition, and avoiding disruptive effects. It happens to be that technology potentials are fraught with pervasive uncertainties. Besides, in addition to offering opportunities, technology dynamics poses the threat of disruptive effects—leading to migrating prosperity and creating wealth accumulation and annihilation effects. Invariably, management fails to address all these issues adequately. Due to such management failures, we have witnessed the spectacular rise of Sony and the fall of RCA and Kodak. Due to it, IBM gave away the PC business opportunities to Intel and Microsoft and proceeded towards filing chapter 11. There have been many such stories highlighting the necessity of technology lifecycle management.
Technology is like living things. Upon systematic scientific efforts or tinkering, they are born. Perpetually, they begin the journey in embryonic form, keeping potential latent. Irrespective of how they are born, their growth demands systematic knowledge generation. Upon reaching adolescence, they qualify to fuel innovations. Their roles could be for incremental advancement of existing products and processes, innovations of new ones, or fueling creative destruction out of reinvention. Some of them are amenable enough to progression for unfolding innovation might, causing creative destruction—making once-powerful firms bankrupt.
On the other hand, proper management of growth potential and leveraging it leads to the rise of startups into mega-success stories. In some instances, even a nation rises out of the exploitation of latent possibilities of a few technologies. For example, Taiwan has grown as a powerful economy due to silicon technology’s management success, which it did not invent. Similarly, Japan succeeded in developing a high-performing industrial economy due to its success in leveraging transistor technology invention.
Technology lifecycle stages:
Concerning maturity, the technology life cycle has four distinct phases: (i) invention, (ii) infancy, (iii) growth, and (iv) maturity. From the perspective of exploitation of innovation opportunities, the life cycle also has four stages such as (i) emerging, (ii) pacing, (iii) key, and (iv) base.
Emerging technologies are in the early stage of development, and thus their innovation potential is unproven. But they have the possibility of supporting reinvention or adding significant features. Pacing technologies have yet to prove their total value but have the potential to alter the rules of competition by providing a considerable advantage. For example, the lithium-ion battery has been a pacing technology for the automobile industry. Key technologies have proved effective, but they also provide a strategic advantage because not everyone uses them. For example, as of 2021, 5nm semiconductor technology has reached the status of crucial technology. Base technologies are commonplace in the industry; everyone must have them to be able to operate. For example, the multi-touch-based user interface is now the base technology for smartphone innovations.
Technology life cycle management faces the challenge of detecting latent potential and predicting likely growth trajectory:
During the birth, the potential remains latent. All the technologies have shown the same characteristics, from the Steam engine, Transistor to the Electronic image sensor. Besides, not all technologies offer the same level of scalability. Hence, management faces uncertainty in predicting likely growth trends. For example, during the birth of Transistor in 1947, the electronic image sensor in 1969, PC in the early 1980s, and light-emitting diode and flash memory in the 1960s, management faced opaqueness in detecting latent potential. Hence, highly innovative companies like IBM, RCA, Kodak, and DEC, among many others, made grave mistakes and suffered from disruptive effects. On the other hand, once small companies like Sony, Intel, Apple, and Microsoft believed in the potential of emerging technologies and succeeded in creating mega successes out of it.
Creating scientific knowledge and developing an intellectual asset base for technology lifecycle management:
Sometimes, technologies are born out of tinkering and craftsmanship. For example, steam engines and incandescent light bulbs were born out of tinkering. But many technologies such as electricity were born out of the development of scientific knowledge. Nevertheless, all technologies demand a systematic flow of knowledge for nurturing the latent potential. In some instances, management faces a challenge in maintaining a good balance between exploiting the current state of technology and future advancement. Consequently, even inventors or leaders lose the edge to the followers.
For example, IBM invented the hard disk in 19556. Despite being an inventor and pioneer in rolling out innovation, IBM lost the edge to Toshiba. Similarly, Sony became far more successful than RCA and many other high-performing electronics companies in advancing and exploiting the transistor technology. On the other hand, due to a lack of scientific knowledge, steam engine potential remained latent for as high as 1700 years.
Synchronized response for leveraging technology:
In many instances, technology life cycle management demands a synchronized response from multiple stakeholders. Due to pervasive uncertainties, it is often beyond the capacity of a single firm to respond to unfolding technology possibilities. For example, in the absence of the synchronized response under the leadership of the Government of Denmark, wind energy technology potential could have remained untapped. Similarly, China’s Government has drawn up a multi-dimensional response for leveraging electric vehicle potential. On the other hand, America’s success in several technologies, the US government’s synchronized response played a vital role. It’s also true that due to relative weakness, the USA has lost its edge in some key technologies. One of the notable ones has been silicon processing. In retrospect, in many cases, profit-making incentives of the market economy are not good enough to mobilize a timely synchronized response along the whole technology lifecycle.
The core challenge of technology lifecycle management: leveraging opportunities and avoiding disruptive innovation effect
For sure, we all get excited about technology possibilities. But to derive success from it, innovations around them must exceed threshold levels and win the competitive race. In the early stage, the decision-making challenge is about technology feasibility. For example, despite showing high promise, machine learning-type technologies have been struggling to cross the threshold level to enable autonomous vehicles and many other AI applications to roll out. Technology leveraging should focus on five questions: (i) anticipated market receptiveness, (ii) technology feasibility, (iii) economic viability, (iv) anticipated competence development, and (v) organizational suitability.
On the other hand, late entry faces barriers from incumbents. Determining the optimum entry point is a management challenge. Besides, we need strategies to cross threshold levels. More importantly, winning the competitive race is at the of core technology lifecycle management. Besides, the uprising of innovations around emerging technology core also poses threats of creative destruction and disruptive innovation. Hence, management faces the challenge of how to respond and when to switch to the next wave.
Technology acquisition management:
In leveraging unfolding opportunities, management faces the challenge of developing an adequate technology portfolio. In this age of competition, no single company affords to have full the internal capacity to pursue the journey from technology invention to maturity. More or less, all companies need to acquire technologies from the outside.
Technology acquisition is a critical, expensive, and time-consuming process. It does not happen all of a sudden as it is desired. But the market demands a timely response, often unpredictable. We need an excellent decision-making capability to compare multiple options to address them adequately. Yet despite their strategic potential, many technology acquisitions fail to create value. The CEO of serial buyer Cisco Systems has estimated that the failure rate for technology acquisitions is as high as 90%.
Monitoring progress, predicting creative destruction force, and managing transition:
As mentioned, technologies are fraught with a high level of uncertainty. It’s not limited to the technology itself. It also encompasses customer preferences, competition response, and externalities. Management challenges include analyzing unfolding dynamics, detecting reoccurring patterns, and developing cause-effect models. Such models help predict the likely unfolding future.
Along with innovation possibilities, prediction challenge includes the likelihood and timeline of the uprising of new waves reaching the inflection point. As such an uprising poses the threat of creative destructions, the management of incumbent firms faces the challenge of choosing an optimum time of switching. The management behind the emerging waves also faces the challenges of reaching the inflection point. Besides, it’s also challenging in creating barriers to the switching movement of the incumbents. From the users’ perspective, making the switch from a mature one to an emerging one at the right time is also a management challenge. For example, due to weakness in predicting the uprising of wind and solar energy, many countries are scraping coal-based power projects after incurring substantial costs.
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